2. 2
Strategy
Strategy is: “The comprehensive, decisive planning of long-term actions that will preserve or
significantly change the current situation.”
The successful achievement of a strategy requires change management!
3. 3
Strategy
What can complicate understanding is there are several levels of strategy:
Functional
Market
Global
Corporate
Business
Our scope is for this overview is Business Strategy.
A business strategy should improve effectiveness, efficiency, and viability.
Recognizing and developing a company’s unique way of delivering value (core competency)
goes a long way in ensuring viability.
Core Competency - Hamel and Prahalad (1990):
It provides customer benefits
It is hard for competitors to imitate
It can be leveraged widely to many products and markets
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Strategy & Policies
Where does Strategy Fit in:
1. Purpose
2. Goals & Objectives
3. Vision
4. Strategy
5. Business Model
Where do Policies Fit in:
1. Principles
2. Policies
3. Standards
4. Methodologies
5. Functions
6. Processes
7. Procedures
8. Skills
Without a purpose, objectives, goals, and a vision, strategy results will be significantly different
than what was intended.
Guided by principles, reconciling policies through skills provides a great framework.
Be aware of informal policies. If there is a perceived void in existing policies, employees will
develop something and act on their own. It happens.
Informal policies provide great insight into an organization’s culture.
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Outline of Developing & Implementing Strategy
1) Ensure the reason for being in business is understood; Purpose Statement
2) Cultivate your vision and defining goals
3) Identify Objectives
A. Objective are significant improvements that will take 3 - 5 years and get you closer to your vision
4) Gain a thorough understanding of your current situation
5) Conduct a gap analysis of current situation and objectives
6) Determine what can be done in the next 12 months; Annual Improvement Priorities
A. Set targets and someone responsible for each
7) Develop the plan
8) Each year repeat steps 3 through 6
9) After achieving Objectives, repeat steps 2 through 6
Change Management:
Make sure you are effectively managing change
Organizational Design:
Be mindful of the organizational strategic and structural factors that will be affected or need to be
adapted
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The Purpose is a Good Place to Start
• Why do you believe you are in business?
• What would your employees and customers say?
• The purpose for being in business should include:
– What product or service is provided
– How you do it
– Why your company should be the one to provide
– Who you serve
– Where you serve
• And… it should only be one, maybe two sentences
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Creating a Vision
• What will your company look like in 7 to 10 years?
– It should be a story of how you deliver on your purpose better than you do today.
– Who is in the story and maybe who is not.
• Get as many as possible to help communicate the future version of your business
– As you begin describing the vision, listen for feedback. Incorporate it into the story. The words of your
employees in the story of the vision will only strengthen its effectiveness and adoption.
• Identify two or three goals that encapsulate the vision and make it more tangible.
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Strategic Objectives
• Specific, tangible movement taken to achieve a desired goal
– Measurable
– Attainable within 3 to 5 years
– Realistic
• Used to provide direction and guidance in achieving the goal statements of the vision
• At least one, no more than 3 for each vision goal
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Understand the Current Condition
I. Markets (present and adjacent)
II. Customers
III. Competitors
IV. Substitutes
V. Suppliers
VI. Your Products/Services
VII. Performance
VIII. Capability
IX. Capacity
X. Industry
XI. Economy
XII. Policies to skills (formal and informal)
Quantitative measures are required
Comprehend as much as possible and prioritize as it relates to your intent.
Don’t let this step bring development and execution to a halt.
Many facets of business to understand:
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Annual Improvement Priorities (AIPs)
• Programs, projects, initiatives or Just Do Its (JDIs) that close, or achieve progress towards
closing, the gaps.
• To be completed by the end of the first year.
• Have at least one way of measuring progress to results for each AIP
– Avoid creating measures that only mean something to the AIP
– Use existing business measures whenever possible
• Avoid activity measures. Examples of those not to use are:
– Number of improvement events conducted
– Participation in program meetings
– Number of suggestions
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Measure Progress
Identify how you want to progress and track it. Tracking template:
For each metric determine how
you expect each to progress
every month; ie if you graphed
each metric for each month what
would the plot look like:
A. Step-wise
B. Hockey Stick
C. Linearly
D. The ole “Hail Mary”
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Strategy Framework
Show Connections of
Policies and Processes
throughout the company.
Tools to use:
• Affinity Diagram
• Strategy Map
• X-Matrix
Link metrics throughout
the company tied to
Policies and Processes.
Tools to use:
• KPI Tree
• Strategy Map
• X-Matrix
Strategy to Daily
Activities need to be
Reconciled
Relate
Strategy
And
Sales & Operations
Planning
And
Day-to-Day Operations
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Strategy Map Example
• Map your strategy
• May be useful to construct a
current state and a future
state
• Show where the significant
changes need to take place
• Show gaps between current and
expected
• Include metrics
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X-Matrix Example
Use of a X-matrix can show how policies, processes, and metrics relate to each other and their improvements
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KPI Tree Generic Example
Shows how results of activities
throughout the company are
related
• Each employee understands
how their efforts affect
company goals and objectives
through key performance
indicators
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KPI Tree Utility Industry Example
The U.S. utility industry is graded on SAIDI
• It measures the number of customers without power and for how long
• Used correctly the KPI tree can show immediate, as well as long term, solutions to improving the score
• While this provides a structure to improve, a better objective would be to ensure the power never goes out.
– 1 – SAIDI / 8760 hrs. Or, achieve 100% of homes with power 100% of the time.
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Putting it All Together
• Developing and executing strategy significantly changes the way you do business
– This will happen whether it is done well… or not
• It involves understanding your current situation in detail
– Think broad and deep
• It requires understanding what the strategy is expected to look like
– Vision and goals established and well communicated
• Enabled Change Management skills will help avoid a great deal of pain
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Putting it All Together
• Requires active participation by all leaders
– Leaders must engage their employees
• Even though it is different than working in the business, it must be reconciled with day to day operations
– Incorporate into existing staff meetings, newsletters, quarterly/annual reviews, performance dialogues,
production meetings, etc
• Make sure policies and processes reflect changes/improvements as they happen
• Repeat steps 3 – 6 (Slide #5) each year until objectives are achieved
• After objectives are met, then repeat steps 2 – 6 (Slide #5) until the business looks like its future self
• Don’t worry if after 3 to 5 years a new vision comes into focus.
– Just don’t slide backwards
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Questions?
For more information or help on Strategy, contact us:
Visit: www.driscollsolutions.com
Write: info@driscollsolutions.com
Call: 803-431-7810